Ladies and gentlemen, thank you for standing by. Welcome to the Airbus H1 2025 Earnings Release Conference Call. I am Sharon, the operator for this conference. [Operator Instructions] The conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to your host, Guillaume Faury, Thomas Toepfer and Helene Le Gorgeu. Please go ahead.

Thank you, Sharon, and good evening, ladies and gentlemen. This is the Airbus H1 2025 earnings release conference call. Guillaume Faury, our CEO; and Thomas Toepfer, our CFO, will be presenting our results and answering your questions. This call is planned to last around 1 hour. This includes Q&A, which we will conduct after the presentation. This call is also webcast. It can be accessed via our homepage by clicking on the dedicated banner. Playback of this call will be accessible on our website, but there is no dedicated phone replay service. The supporting information package was published on our website earlier today. It includes the slides, which we will now take you through as well as the financial statements. Throughout this call, we will be making forward-looking statements. I invite you to refer to our safe harbor statement that appears in the presentation slides, which applies to this call as well. Please read it carefully. And now over to you, Guillaume.

Guillaume M.J.D Faury: Thank you, Helene, and hello, ladies and gentlemen, and thank you for joining us today for our H1 2025 results call, and I'm happy to be here in Amsterdam with Thomas and Helene. Let me start by saying that it was a real pleasure to see many of you last month in Paris, the occasion of our business update. It was indeed the opportunity to update you on how we are progressing in what I think we can call an increasingly complex and fast- changing environment. So we updated you, in particular, on the Commercial Aircraft ramp-up. And when it comes to European defense, Bruno and Mike, the CEOs of our two divisions, the Airbus Defense & Space and Helicopters. Bruno and Mike highlighted how our diversified products and solutions portfolio can and will contribute to bridging the so-called capability gap. Since we met since then, NATO confirmed the budget increase during the Hague Summit, and it constitutes an important step forward in that direction. On global trade, we have taken note of the agreements between the United States and the European Union that will bring our industry back to the tariff-free environment that we have enjoyed since 1979, and which has contributed so much to the success of our industry. Indeed a stable and predictable trade environment is essential for highly integrated global aerospace industry. Before moving to the H1 results, let me mention the, again, strong commercial momentum that we have observed in the first half of the year across all businesses, and notably during the very active Paris Air Show we had as well as the progress made in the transformation of our Defense & Space division. When it comes to deliveries, in H1, we delivered 306 commercial aircraft, and consistent with what we told you at Q1, the delivery profile is back-end loaded. Actually, we produced in the first half of the year in line with our plan. But in the absence of engines, it resulted in 60 gliders at the end of June. So 60 aircraft fully produced but with engines missing. This is reflected in our H1 financial results with EBIT adjusted standing at EUR 2.2 billion and free cash flow before customer financing at a minus EUR 1.6 billion. On that basis, our 2025 guidance remains unchanged. I remind you that it is excluding the impact of tariffs, and I will come back to it later. Now let's look at our commercial environment, starting with Commercial Aircraft. Our latest GMS or global market forecast confirms the industry's fundamentals remain solid with a continued growth trajectory over the next 20 years. We observed strong demand for our aircraft, driven by both growth and fleet replacements as airlines turn to latest generation aircraft offering around 25% fuel burn efficiency gain. This momentum was on full display at the Paris Air Show, where we announced more than -- sorry, 240 orders and commitments, including from new customers. During H1 '25, we booked 494 gross orders, so close to 500. On the A220, we booked 40 gross orders, and we are pleased to count LOT Polish Airlines as a new customer with their first Airbus order as part of its fleet modernization. Looking at the A320 family, we booked 291 gross orders. This brings our backlog to 7,185 A320 family aircraft, out of which around 3/4, around 75% are for the A321. Moving to the widebodies. On the A330, we booked 71 gross orders confirming the high demand for this very versatile aircraft, and on the A350, we booked 92 gross orders underpinning the continued commercial momentum of this product. This brings our widebody backlog above 1,000 aircraft. Net orders amounted to 402 aircraft, including 92 cancellations, which were largely anticipated and already embedded in our backlog valuation -- the financial backlog valuation as of December 2024. Our backlog in units increased to 8,754 aircraft at the end of June 2025, again 8,754 aircraft. Looking at Helicopters. In the first half, we booked 171 net orders compared to 233 in H1 2024. And this 171 are well spread across the portfolio. We've recently announced an order from Greece for 8 firefighting H215. And we also signed a contract with Norwegian Air Ambulance for up to 8 H145. On the defense side, this quarter was marked by some key milestones, notably the French Framework Agreement for the VSR-700, it's an uncrewed aerial system, so a drone. As we launched with our partner, Leonardo, studies to define the long-term evolution of the NH90, the so-called Block 2. And while on the NH90, the first 2 Spanish Navy helicopters were delivered. We also recently celebrated the H160M, so the military variant of the H160. We celebrated the first flight, the maiden flight of this militarized version of the H160. I would like to add a few words on drones as we have a clear strategy to propose a complete product range to our customers. This was presented by Bruno and Mike, you remember at the business update. The Australian start-up Drone Forge signed an agreement to purchase 17 flex rotor uncrewed aerial vehicles. It's the single largest order for the Flex Rotor to date, and makes me very happy to see these products ramping up. The Flex Rotor is indeed a pivotal component fully integrated into our overarching strategy for advancing crewed, uncrewed teaming capabilities. These all are new words we have to to learn as there's so much happening on that front. And we continue to see positive momentum, in particular, on the military market, and we remain focused on securing new business opportunities in both our home countries but also on export markets at Helicopters. Moving to Defense & Space, the order intake stands at EUR 5.1 billion in the first half. And before detailing the main orders of the quarter, let me start by highlighting the agreement reached with OCA on the A400M to advance 7 deliveries for France and Spain and, therefore, further increase the visibility on the production for the program. For the agreements, both Airbus and OCA will review the industrial status of the program on a yearly basis, giving the A400M collection setup stability to pursue the evolution of the platform and open and secure hopefully, export opportunities. While on the A400M, we booked a contract to equip 23 German Air Force A400Ms with a protection system against infrared seeking missiles, further enhancing the capability of the aircraft. Additionally, NATO has ordered 2 additional MRTT aircraft, bringing the multinational MRTT fleet to 12. This enhances NATO capabilities for refueling, strategic airlift and medical evacuation. Turning to Eurofighter. We welcome the MOU signed between Turkey and the U.K. for the procurement of Eurofighters. This is a very positive development. As a key partner in the Eurofighter Consortium, Airbus remains committed to supporting the program and its users, contributing to European Defense Corporation. That's what we do, and ensuring our allies are equipped with world-leading capabilities. Moving now to Space Systems. As you know, we are currently in the middle of a turnaround plan, of a transformation plan aiming to restore competitiveness, and I'm pleased with the progress made by the team, really pleased by what they're doing. Our new Airbus Defence and Space organization has now gone live and will further support this. This strategic change announced last October ensures better end-to-end responsibility and accountability across our three businesses and optimizes our cost structure benefits we are already seeing today. On the order front, Airbus has been selected as a prime contractor for the development and manufacturing of 2 new earth observation so-called past 2 radar satellites, further reinforcing Spain sovereign space capability. We are also very pleased with the recent launch of the latest generation optical CO3D drone use satellites, leveraging our one web expertise of constellation production, these satellites will deliver a cutting-edge 3D map of the earth land mass, providing high resolution and high revisit observation capabilities for both government and commercial use. In parallel, as you know, we are in discussions with Leonardo and Thales regarding a potential consolidation of our satellite activities. The due diligence phase is ongoing, and we continue to believe -- I continue to believe this could be a major development, enabling the creation of a unified and competitive European space player. And now Thomas will take you through our financials. Thomas?

Yes. Thank you very much, Guillaume. And hello, ladies and gentlemen, thanks for joining our call. I'm now on Page 6 of the presentation. And as Guillaume said, I will quickly take you through our financial performance. So as you can see on the slide, our H1 2025 revenue increased to EUR 29.6 billion, which is up 3% year-on-year, mainly reflecting the higher contribution from our divisions, the stronger services volumes across our businesses but then again, partially offset by fewer commercial aircraft deliveries. On R&D, as you can see on the right-hand side, our expenses stood at EUR 1.4 billion in H1, which is lower compared to H1 2024 and consistent with the lead initiative. And on that note, let me remind you that our R&D expenses are expected to only marginally increase in 2025 with a back-end loaded profile. Now let's turn to EBIT adjusted on Page 7. Our H1 2025 EBIT adjusted increased to EUR 2.2 billion from EUR 1.4 billion in H1 2024. And of course, you are aware that in H1 '24, we recorded EUR 989 million of charges in our space business, which, of course, did not repeat. Now the lower volume of commercial aircraft deliveries with a less favorable mix is reflected in our profitability and is partially offset by a more favorable hedge rate and lower R&D expenses. And the number also reflects a stronger performance in Defence and Space. Now coming to the EBIT adjustments, which were negative in the first half of 2025 and you have them on the right-hand side of the page, they included, first of all, a negative EUR 391 million impact from the dollar working capital mismatch and balance sheet revaluation mainly reflecting the mechanical impact coming from the difference between transaction date and delivery date, of which EUR 378 million in Q2. It also contains a negative EUR 105 million related to the Airbus Defense and Space restructuring, which we recorded in Q1. Number three, it contains negative EUR 57 million related to the stabilization of certain Spirit AeroSystems work packages, mostly recorded in Q2. And finally, a negative EUR 34 million other costs, including compliance and M&A, of which minus EUR 10 million in Q2. So this altogether takes our H1 2025 EBIT reported to positive EUR 1.6 billion. As you can also see, the financial result was positive EUR 490 million and mainly reflects the revaluation of certain equity investments and revaluation of financial instruments, partially offset by the evolution of the U.S. dollar. And the tax rate of the core business continues to be around 27%, now the effective tax rate is 31.5% in H1, including the tax effect on the revaluation of certain equity investments as well as a net deferred tax asset impairment. We still expect the French spare tax to result in an impact of around EUR 300 million in 2025, both P&L and cash wise. And in H1, we recorded the part which is related to the year 2024, as well as the part which corresponds to the first half of 2025. And all of that resulted in a net income of EUR 1.5 billion with an earnings per share reported of EUR 1.93, and our H1 2025 EBIT EPS adjusted stood at EUR 2.15 based on an average of 789 million shares. Now with that, let's turn the page and look at our U.S. dollar exposure coverage. As you can see in H1 2025, $9.1 billion of forward matured with the associated EBIT impact and euro conversions realized at a blended rate of $1.18 and versus $1.21 in H1 2024. And in H1 2025, we also implemented USD 7.7 billion of new coverage at a blended rate of the $1.14. And as a result of that, our total U.S. dollar coverage portfolio in U.S. dollar stands at $81.4 billion with an average blended rate of $1.21 as compared to $82.8 billion at a blended rate of $1.21 at the end of '24. Now let's look at Page 9 with a more detailed look at the free cash flow. Our free cash flow before customer financing was negative EUR 1.6 billion in the first half of the year. And this outflow was mainly driven by the change in working capital, and it notably reflects the planned inventory buildup to support our ramp-up across our businesses, but of course, the high level of gliders that Guillaume was mentioning. And finally, it also includes a phasing effect of cash receipts and payments. The A400M weighted negatively on our free cash flow in the first half of 2025 as the deliveries are back-end loaded, but we continue to expect it to be broadly neutral from a free cash flow perspective in the full year of 2025. As you can also see on the slide, our H1 '25 CapEx was EUR 1.3 billion. And as we told you at the occasion of the business update, we expect it to continue to increase in 2025 to support our industrial ramp-up. So with that, the free cash flow was negative EUR 1.6 billion with nearly no impact from customer financing, and on that note, the aircraft financing environment remains strong and competitive, and we expect sufficient liquidity to finance our 2025 deliveries, and we keep on closely monitoring the possible impact of tariffs. So with all of that, as you can see on the slide, our net cash position stood at EUR 7 billion as at the end of June, also reflecting the dividend payment as well as the weakening dollar environment. Nevertheless, our liquidity remains very strong with around EUR 30 billion. And with that, I would like to hand it back to Guillaume.

Guillaume M.J.D Faury: Thank you, Thomas. And looking at the businesses, starting with Commercial Aircraft. In the first half, we delivered 306 aircraft to 65 customers. And by family, on narrow bodies, we delivered 41 A220 and 232 A320s, of which 143 A321s, representing 62% of A321 deliveries for the A320 family. On A320, no change, we continue to ramp up towards the rate of 75 A320s per month in 2027. After delivering the first XLRs from the Hamburg file we delivered in June of this year, the first one from Toulouse. The integration of XLR capabilities into existing files is part of our global strategy of increasing the flexibility and capacity of the entire production system. It's all about resilience. We are also very pleased that Qantas Airways became the launch operator of the A321 XLR in Asia Pac following the delivery of its first aircraft in June. We delivered 33 widebodies in the first half, of which 12 A330s and 21 A350s. On the A330, we are currently stabilizing the monthly production rate of 4. In order to meet customer demand, we now target to reach rate 5 in 2029, and that's a change compared to previous calls. As mentioned earlier, specific supply chain challenges, notably with Spirit Aerosystems are putting pressure on the ramp-up of both the A350 and the A220. On the A350 on the target rate, there is no change. We continue to target rate 12 in 2028. And on the A220 here as well, no change. We continue towards the monthly production rate of 14 in 2026 next year. Overall, with the exception of engines on the A320 family, we produced in line with the plan. The challenges for the year have not changed, notably with the persisting tensions on engines for A320, resulting in 60 gliders at the end of the first half of this year. So by end of June, we were at 60 gliders. We expect it to peak over the summer and before it normalizes. We continue to work closely with our engine partners to recover in the second half of the year and to deliver on our 2025 commitments, and I'm counting on them. Engine partners, if you listen to me, I'm really counting on you. Now let's look at the financials for our commercial aircraft business. Revenues decreased 2% year-on-year, mainly reflecting the lower number of deliveries against the backdrop of those gliders. EBIT adjusted was lower at EUR 1.7 billion in the first half with a decrease of deliveries and unfavorable mix as well as the excess workforce being offset by a favorable hedge rate and lower R&D expenses. The company, Airbus is making good progress on the acquisition and the stabilization of the Spirit Aerosystems work packages, while the expected closing date is now shifting into Q4 due to the ongoing regulatory approvals, all parties are putting necessary efforts, all necessary efforts into the closing process and on the route to operational readiness for what I would call day 1. Looking at helicopters. In H1, we delivered 138. It's 14 more than in the first half of 2024. Revenues increased around 16% to EUR 3.7 million, reflecting a solid performance from both programs and services. EBIT adjusted increased to EUR 249 million, reflecting growth in services as well as higher deliveries, but with a less favorable mix. And let's complete our review with Airbus Defence and Space. Revenues increased 17% year-on-year to EUR 5.8 billion, driven by higher volumes across all business lines. EBIT adjusted stood at EUR 265 million supported by higher volumes and improved profitability across all businesses, including our two main joint ventures. On the A400M program, we are engaged in positive and forward-looking discussions with the launch nations and OCA. This was notably marked by the agreement reached in June with OCA to advance 7 deliveries for France and Spain and to further increase the visibility we have on the production for the program. And in light of uncertainties regarding the level of aircraft orders, Airbus continues to assess the potential impact on the program's manufacturing activities, risks on the qualification of technical capabilities and associated costs remain stable. Moving forward to -- on to our guidance, which remains unchanged. As the basis for the guidance this year, the company assumes no additional disruptions to global trade or world economy, air traffic, the supply chain, the company's internal operations and its ability to deliver products and services. And the guidance continues to exclude the impact of tariffs on the company's business. And we are obviously cautiously monitoring the implementation of the recently concluded agreements between the United States and the European Union on tariffs. The guidance includes the impact of the integration of certain Spirit AeroSystems and work packages based on preliminary estimates and now assumes as I told you earlier, a closing in the fourth quarter of this year. And on that basis, the company targets to achieve in 2025, first, around 820 commercial aircraft deliveries; second, an EBIT adjusted of around EUR 7 billion; and third, free cash flow before customer financing of around EUR 4.5 billion. And the anticipated impact of the integration of certain Spirit Aerosystems work packages on the company's guidance remains in line with previous estimates. I will conclude with our key priorities. As detailed during the business update, we are obviously focusing on our ramp-up across all businesses, while relying, I'd like to repeat it on the core pillars of the company that underpin everything we do: safety, quality, integrity, compliance and security. These are our five core pillars. When it comes to the commercial aircraft ramp-up, we continue to work closely with our suppliers while actively preparing the integration of the Spirit AeroSystems work packages. On Defense and Space, we continue executing our turnaround plan to restore competitiveness in the division, and we pursue the workforce adaptation as per the agreement reached with our social partners, while looking at different scenarios, to create scale in the European space business and in particular, the one in consolidating with Thales and Leonardo. And finally, European defense is at an inflection point. We are engaged with Airbus Defence and Space and Airbus Helicopters to contribute to bridging the capability gap that Europe has to bridge. So now I turn back to you, Helene. I guess, we are in the QA.

Absolutely, Guillaume, thank you very much. We will now start our Q&A session. So please introduce yourself and your company when asking a question. [Operator Instructions]. So Sharon, please go ahead and explain the procedure for the participants.

[Operator Instructions] And our first question comes from the line of Chloe Lemarie from Jefferies.

I have two. My first one would be on Defence and Space. So your performance year-on-year in Q2 is pretty much the full impact of the EUR 1 billion charge that you had last year, but the messaging has consistently been that only 2/3 of those charges was nonrecurring. So how should we think of the impact of the non-repeat of that charge from last year versus the underlying margin improvement in the division? The second one is on Spirits with the closing kind of pushed out Q4, does that affect in any way your plan for Section 15 production improvements? And does that still support the stable delivery target for the A350?

Guillaume M.J.D Faury: Thank you, Chloe. Thomas?

Yes, Chloe. Yes, let me try to answer your question. So first of all, yes, you're right, we said it would be correct to reverse 2/3 of the charges that we incurred in 2024, so 2/3 of the EUR 989 million. And if you do that, you will find that Airbus Defence and Space actually had a very pleasing performance if you compare it with the underlying operational performance in 2024. So we -- our interpretation of that is we are on a good track, and we do see good momentum in the business with the transformation program being in full swing, and also specifically with the restructuring and space going as expected, and we're very pleased with it. So I think the short message is, yes, we do believe that the underlying performance of ADS has been strong in H1. And on your second question, Spirit, it's true that the closing is shifting, but the underlying impact both for the 2025 financials should be negligible. And secondly, we believe that we are sufficiently working well with Spirit to also make sure that the Section 15, which, of course, is critical for the ramp-up of the A350 next year and the year after, which is on track. So in our view, no change to our expectations for next year.

Your next question comes from the line of Benjamin Heelan from Bank of America.

I think in one of the earlier remarks, you made some comments maybe to the media about delays with Pratt & Whitney. I was just wondering if you could give us some color on this? And is this new issue since the air show, I don't remember it being talked about at your Investor Day. And then with regards to CFM, obviously, the deliveries have continued to be relatively slow that we see in terms of A320, could you just give us some color how are you seeing the situation play out as CFM and your level of confidence that you're on an improving trajectory around the CFM LEAP-1A deliveries.

Guillaume M.J.D Faury: Thank you, Ben. So indeed, the Pratt & Whitney issue is, if I call it an issue, I think the gap is a new one. Again, the vast majority of missing engines are CFM engines on the 60 gliders. So it's mainly a CFM problem, but they Pratt engines missing. It's mainly coming from the strike. So they had perturbances and disturbances on the flow we've been impacted, and we expect a recovery by the end of this year. When it comes to CFM, which again, is the lion's share of the missing engines, situation is improving. You know that we had two issues in a row they had, I mean, CFM had two issues in a row one at GE at the beginning of the year that delayed the deliveries of their core to Safran. And then Safran having a long 7 weeks or 8 weeks strike that delayed significantly a large number of deliveries. This is behind them. They're ramping up. Ideally, we would like them to ramp up faster. So we carry some risk, but they have a plan that is consistent with what we need. It will be very backloaded. We don't like to be in that situation of backloading because it's increasing the risk of not getting there. But as of today, the plan from CFM, and mentioned Pratt & Whitney already, but the plan from CFM is consistent with what we need to be at 0 glider by the end of this year and deliver according to our guidance. But I don't want to hide that it will not be a walk in the park, and it's more backloaded than what we like.

Your next question comes from the line of Ross Law from Morgan Stanley.

Morgan Stanley, Research Division So two, please. The first, just on gliders. You mentioned that you had 60 at the end of H1. What is that number today? And what do you expect that to go to before it starts to reduce? And the second question is just on the risk of a potential strike at your wings factories in the U.K. Can you just maybe give us an update on the status there and your ongoing discussions? And how should we think about the potential impact going forward?

Guillaume M.J.D Faury: My answer will be a bit disappointing. I don't know what's the number as we speak for the gliders. And it's changing by day as we are delivering receiving engines, and I don't think that's worth commenting on -- within a month or even on a monthly basis. So directionally, it's plateauing now and is supposed to reduce by -- after the summer and moving to 0 by end of this year. The strike in the U.K., I was discussing it with my Head of HR earlier today. I don't have a clear view of the implications. The team is on it, and we want to find a resolution, obviously, and we think that's possible.

Our next question comes from the line of Christophe Menard from Deutsche Bank.

I had one on the deliveries and the phasing of deliveries in Q3 and Q4. How many planes can you realistically deliver per month or per quarter? I mean do you have also some capacity bottleneck in terms of administration or first flight? And the second question was more on the -- your strategy in UAVs. There was an agreement or there was an announcement with Kratos. What is your strategy? I mean, we've heard that in Paris Air Show that you were also partnering with, I think, Quantum. Do you adopt the strategy of partnership in that field? Or do you intend to develop your own solutions?

Guillaume M.J.D Faury: Yes. Thanks too for the questions. So on the deliveries, well, there's no bottleneck on deliveries. Deliveries sometimes we have -- if I take the extreme case of a missing document or a financial topic. We have aircraft ready already technically accepted, then you wait for something to be resolved and you have a large number of deliveries. The flow of production is limited. The flow of deliveries can go up and down. And as far as I remember, since I was appointed as CEO, I think we peaked at something like 137 or 138 deliveries in 1 month of December, maybe, by the way, in 2018 or 2019. So you can -- you see we can go significantly beyond 100, but these are deliveries. It doesn't mean that we are producing at that pace, obviously. So -- and it will be very backloaded this year. So we expect a very strong Q4, and therefore, Q3 that will put us in this backloading situation for Q4. When it comes to Kratos and the drones, well, we have a strategy of speed, which means we are doing and we are buying. We are cooperating and we're investing. And the agreements that we have signed with Kratos to investigate the possibility of using their platform is part of this opportunity or this strategy to use opportunities to be much faster to the market. We are putting our mission packages on existing platforms when we don't have the platform waiting for the platform to be developed or signing a long-term agreement for availability of platforms coming from others. But as you have seen, if you were present at the Paris Air Show, we have now a very comprehensive lineup of UAVs of drones with commonalities on ground systems and communication systems. So we are developing a strategy to go to market with a broad and competitive lineup of UAV.

Your next question comes from the line of Ian Douglas-Pennant from UBS.

I'm not afraid I'm going to ask more about gliders, dominating the question dominating the call. First one is really about inventory levels more than gliders itself. Great to hear you plan to reduce the glide number down to 0 at the end of the year. Will inventory levels remain elevated despite this, given that you said in Paris that your strategy with respect to the supply chain as -- seen some nuance change, I guess, in the last year or so providing more financial health to them. Does that mean that you need to keep more inventory on your balance sheet stable state longer term? Secondly, 60 gliders today is a large number. I mean, in the ultimate reality that you had taken delivery of the engine on time and also that you delivered these to the airline, we'd all be asking you whether there's upside risk to your guidance. Is that a rational way to think about it? Or is there just always some semi-finished or finished inventory just sitting around that can't be delivered for one way or another. And therefore, we shouldn't be asking you whether there's in fact upside risk to your guidance.

So let me try to answer those questions. So first of all, on the inventory, obviously, our inventory for the half year is inflated by the number of gliders as you correctly said, and that is also the key explanation why the cash flow is negative EUR 1.6 billion. But it's also clear that, that should normalize over the second half of the year because we want to bring the gliders down to 0. Nevertheless, on the specific question of inventory, as you know, we're still in a ramp-up phase. We are still in a situation where the supply chain is under stress. It's improving, but it's still, of course, a limiting factor. And therefore, we do not foresee that we will reduce inventories before we have reached a stable state of production. So therefore, even if you strip out the effect of gliders, you should expect that inventories will continue to slightly increase in 2025 and then potentially beyond. And they will only be used once we are in a stable state of production. And secondly, on the upside risk...

Just quickly -- just to round off that question, when you say inventory days -- sorry, inventory will increase, would you mean inventory days? Or do you mean in euro terms?

In euro terms. And on the upside risk, I think that is not what we wanted to bring across. So in our view, we will be able to reduce the gliders to 0. And with that, we stick to our guidance of around 820, but I would say no further interpretation around that.

Your next question comes from the line of Olivier Brochet from Rothchild and Company.

Two questions for me. Could you update us on the A320 assembly line extensions in mobility engine and please? And the second one on Spirit. What approvals are still outstanding? And what are the key ones outstanding at the moment, please?

Guillaume M.J.D Faury: I will give the second one to Thomas, and I take the first one. Well, all on track. What does that mean on track, by next year, we will have those three final assembly lines, additional finance assembly lines in operation. Actually will be inaugurated later this year. That's what we expect. And in Toulouse, I say 3 because 1 is already producing at rate, as you know. And the second 1 is in its completion with first deliveries planned for next year. So it's all on track, and that supports very well the rate 75 that we are targeting for 2027. Spirit?

Yes, it's regulatory approval. As I said, that -- and therefore, I will not make too many comments on it that are related mostly to the Boeing Spirit transaction. You know that our transaction is contingent on theirs. That has to go through antitrust. For that, the final scope has to be known. You know that there was still a little bit of back and forth on some sites. I think that has to be resolved. Once that is clear, I think the FTC approval in the United States should be relatively straightforward. And therefore, we're confident that we will close in Q4 and find quickly a solution to those regulatory things that yes, have to be done relatively quickly. Again, it's not so much on our side, but our transaction hinges or is contingent on the Boeing Spirit transaction.

Okay. Can I ask on mobile when do you think it's going to be online?

Guillaume M.J.D Faury: As I said, it will be producing planes and delivering planes next year.

Your next question comes from the line of Doug Harned from Bernstein.

Two questions. The first one is, let's assume that the engine delivery problems are resolved by the end of this year. When you look at that 75 a month rate in '27, what are the next things that you look at in the supply chain, in your internal operations? Basically, one of the watch items you would have following the engine issues. And then second, one of the great things Airbus achieved almost 10 years ago was breaking through the national silos and the organization and the ownership, making it into a strong unified company. But right now, you're working through a JV on FCAS, potentially one on space. What do you need to be in place to make these JVs successful, given that we've seen many cross-border JVs run into a lot of issues.

Guillaume M.J.D Faury: Okay. So what are the three priorities for the rate 75 to succeed engines, engines and engines. We'll keep working with engine makers in 2026. We need their support. They have to deliver on the ramp up, both for us and for the aftermarket as the number of aircraft flying the Neos flying is increasing quite fast. So that will remain the priority and the pacing supply that will support the rate 75. When it comes to the JVs, well, we are in a different situation when it comes to FCAS and when it comes to space. In space, we are actually working with Thales and Leonardo on the project that consists of putting together our space activities in a joint venture, a bit like MBDA. And we have experience in running those JVs, successful experiences, international joint ventures where we are one of the minority partners, and we are defining the guidance, and we have agreed on most of the guidance -- the governance principles with our partners as we by the way, partner with them on other projects. So I'm confident that what we have in mind will work. It will be a normal company with shareholders being Thales, Leonardo and Airbus. When it comes to FCAS, each and every pillar of the future combater system has a different setup and situation. When it comes to the pillars where we are involved, the combat cloud, the remote carriers and the fighter jet. There's no JV. So we are not involved in joint ventures. These are early cooperations mostly on technologies. At a later stage, we might want to change the setup, not even sure. But for the moment, these are so-called program cooperations that don't imply the creation of JVs.

Your next question comes from the line of David Perry from JPMorgan.

Yes. It's just one question I'd like to ask is a bit philosophical, and it's about your relationship with the aero engine companies. A lot of them have reported in the last few days, two big ones will report tomorrow. But the ones that have reported have had quite strong results. And part of those is because they're continuing to deliver quite high numbers of spare engines. So I'm just curious what leverage do you have over them on this? What agreements in place, not just for this year but for next year that they're not only ramping production, but allocating engines to you ahead of selling them as spares.

Guillaume M.J.D Faury: Thank you, David. So I'm happy that our engine partners are in good shape because we need them in good shape. That's maybe the first statement. The second one is the majority of their support and services businesses goes to the in-service fleet, meaning the aircraft powered by the CFM56 and the V25. When it comes to the LEAP or the GTF, they have to serve the growth of Airbus, I mean, the ramp-up and also the ramp-up of aircraft in service as we deliver new aircraft to airlines, we have the size of the in-service fleet of neos that is growing quite quickly, probably more quickly than we have ever done in the past. And it comes against the backdrop of technical and industrial issues that they've had, slowing down on the way to ramping up production and against the backdrop also of shorter times on wins compared to what was expected requiring more spare parts than we expected. So they are actually benefiting and suffering from the service business of those engines, which are not at the level of performance that was expected. When it comes to us, what is important is that we get the share of engines that they have committed to us and that is supporting the ramp-up. On top of the midterm, long-term volumes we've had in 2025, in the end of '24, beginning of '25, operational issues hindering the engine makers on their ability to deliver short-term to us and to airlines. So we should not hold too many conclusions of the situation we're in with gliders that are really related to short-term issues other than production capabilities and investments supporting those ramp-ups. Now I'm not suggesting. I'm not looking at their ability to further support the ramp-up when we are in '26 and '27 because indeed the number of engines that they will have to deliver to Airbus will continue to grow. At the same time, they have to continue to support their engine -- sorry, their airline customers. That's why we are communicating very closely with them on the size of investments, on their equipment, their ability to serve both line fit and support and services of engines in the market, and they are actually struggling to do the two at the same time. So we know we'll continue to work hard with them and monitor very closely the priority they give to line fit to Airbus and their ability to serve both OEMs, aircraft OEMs like us and the airlines because at the end, it should not be either/or it has to be both, and it's not the case today, unfortunately.

Okay. Can I just sneak one more in as well, please, just before we all go on holiday. A lot of your staff take our holiday in August, it's usually a very low month for deliveries. Given how much you've got to do this year, is there any efforts or moves to try and do more overtime or more people to work through August?

Guillaume M.J.D Faury: Of course, we are dealing with both, I would say, national culture, regulatory obligations and commitment to deliver. We are not limited today by availability of staff. We are limited by supply. We have produced by far more planes than engines we have to deliver those planes. So actually, the production rate is working. We are on track on the production. It's not that we need overtime or specific management of the situation, no. We will need a lot of availability of people in the back end of the year to continue to produce and deliver what we have to deliver normally. And on top, deliver the aircraft that will get the engines late and that we need to go through the end of the pipeline, the the installation of the engine, then the test, the flight test and the delivery. So we are not limited by availability of people or by capability of the production system at Airbus this year, we are limited by availability of engines.

Your next question comes from the line of Milene Kerner from Barclays.

My first question is a follow-up to your comment, Thomas, on the Defense and Space. Could you provide some additional color on whether the higher volume absorbed across all the business lines in the first half is sustainable through the remainder of the year? And how should we think about the division profitability trajectory given that it's typically weighted towards Q4? And then my second question relates to your working capital requirements. Following the strong performance you had in H1, how should we think about the phasing of your customer advances over the remaining of the year?

So let me start with the first one. On Airbus and Defense space, I mean, of course, you cannot project it linearly from H1 to the second half, but I wanted to suggest is that indeed, they have a strong performance in all the business units that they have. And I think we're on the right track for them to achieve their target. What are the targets? We said they should achieve a mid- to high single- digit margin. And I think they were quite concrete when we were in Paris to say that we should achieve more than EUR 1 billion of EBIT by the year 2028. And that is the guidance and trajectory that we foresee for the division. And I think we are clearly on track to achieve that. H1, I would say, was a good start on to that trajectory and onto that transition for the division. For the working capital, we still believe that the company will generate positive working capital or will have a positive impact from working capital as we grow, which is contrary to many other business because of these PDP payments that we received. You've seen that the order intake was strong. And therefore, if you take it together, I would say despite the fact that we're expecting inventories to increase by the end of the year, overall working capital effect should be rather positive also in 2025.

We will now take our final question for today. And our final question comes from the line of Ken Herbert from RBC.

Two questions, please. First, if we do give you credit for the glider deliveries in the first half, it does imply a delivery rate based on our math of sort of the low 50s a month on the A320. Just curious how you reconcile this with stated production rates that you call out as significantly higher on that program? And second, I did just want to follow up on the Spirit investment. So you've pushed the closing to the right continue to see, it sounds like a $500 million free cash flow impact this year, and it also looks like you're making additional investments now in the Spirit. So it sounds like are you able to accelerate your investments today? Or should we expect perhaps a smaller number than what you called out is the actual $500 million free cash flow impact this year just based on a delay in the closing?

So let me take the one on Spirit. Again, just to be clear, it's not us pushing out the closing. It is the regulatory hurdles, which are not even so much on our side that push it into Q4. We obviously would like to close as quickly as possible. And on our side, all the operational preparations that we're taking in terms of taking over management control, in terms of all the transitional service agreements, I think we're making very good progress. What I said is that the financial impact though of the delayed closing for 2025 should be limited in the sense that, as we said, it should have a negative impact on the free cash flow of roughly EUR 0.5 billion, which will be compensated, though, by the consideration that we received. And therefore, we said the overall impact on the net cash position of the company should be roughly neutral in 2025. That is still what we're expecting. And the impact of the delayed closing on our EBIT is minor, if at all, it should be rather slightly positive. And finally, also to reiterate what I said, because we are very closely working with Spirit in terms of joint improvement programs, we also think that the impact on the Section 15 and also on the wing production is not negative, and therefore, we stick to our view that the ramp-up that we foresee for the 220 and for the 350 next year and the year after should not be negatively impacted.

Guillaume M.J.D Faury: And when it comes to the question on production rates, not being fully sure I understood. Maybe the short answer is that we've produced in H1 on the single program, exactly in line with the production planning we had end of last year, and it has not changed. And we have not adjusted anything to the supply chain because we have produced according to the plan. And we intend to continue to do it for the second half. Getting the engines in the meantime will bring us to the -- to delivering on the guidance. So that's basically what we see for the first half.

Thank you very much, Guillaume and Thomas. This now closes our conference call for today. If you have any further questions, please send an e-mail to Olivier, Victoria or myself, and we will get back to you as soon as possible. Thank you, and we are looking forward to speaking or to seeing you again very soon.

Thank you, ladies and gentlemen. The conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.